Estimated risk-based capital (RBC) ratio of 320% at March 31, 2016
compared to 336% at December 31, 2015

Book value per share (excluding accumulated other comprehensive
income) of $20.74

WEST DES MOINES, Iowa--(BUSINESS WIRE)--Apr. 27, 2016--
American Equity Investment Life Holding Company (NYSE: AEL), a leading
issuer of fixed index annuities, today reported a first quarter 2016 net
loss of $44.8 million, or $0.55 per diluted common share, compared to
net income of $5.9 million, or $0.07 per diluted common share, for first
quarter 2015.

Operating income1 for the first quarter of 2016 was $21.0
million, or $0.25 per diluted common share, compared to $48.8 million,
or $0.62 per diluted common share, for first quarter 2015.

The first quarter 2016 net loss was increased by $28.4 million ($0.35
per diluted common share) and first quarter 2016 operating income1 was
decreased by $28.6 million ($0.35 per diluted common share) for
revisions to investment spread assumptions utilized in the determination
of deferred policy acquisition costs and deferred sales inducements.
Excluding the effects of these assumption revisions, first quarter 2016
operating income1 was $49.6 million, or $0.60 per diluted
common share.

STRONG SALES DESPITE COMPETITION

First quarter sales of $2.1 billion were up 59% from the prior year
first quarter and nearly equaled the single quarter record set in fourth
quarter 2015. Net sales after coinsurance ceded for the first quarter of
2016 were $1.6 billion, a 35% increase from $1.2 billion in net sales
for the first quarter of 2015 and a 16% decrease from $1.9 billion in
net sales in the fourth quarter of 2015.

Commenting on sales, John Matovina, Chief Executive Officer and
President, said: "Our sales for the quarter were strong on both a gross
and net basis. As expected, we experienced more competition in the
independent agent distribution channel for fixed index annuity products
and those sales fell by 20% relative to the fourth quarter of 2015.
However, that decline was substantially offset by increased sales of
multi-year rate guaranteed fixed annuity products for both American
Equity Life and Eagle Life and fixed index annuities sold by Eagle Life
through broker-dealers and banks. We coinsure 80% of the premiums
received from sales of those products which accounts for the 16%
decrease in net sales compared to the fourth quarter of 2015."

Matovina continued, "A key initiative for us is expanding in the
broker-dealer and bank distribution channels, two channels that
represent a significant growth opportunity for fixed index annuity
sales. We formed Eagle Life to pursue this opportunity and are starting
to show meaningful traction. In this year's first quarter, Eagle Life
sold $416 million, more than double its fourth quarter 2015 sales of
$205 million and just $89 million shy of its full year 2015 sales of
$505 million. The majority of the first quarter increase came from
multi-year rate guaranteed annuities. Eagle Life uses multi-year rate
guaranteed annuities to establish new relationships with financial
institutions with the objective of expanding sales into fixed index
annuities once the financial institution experiences our excellent
service culture. That strategy contributed to a 13% sequential increase
in Eagle Life's fixed index annuity sales to $187 million. But more
importantly, Eagle Life is actively expanding its distribution
relationships and now has selling agreements with 48 distributors. We
expect that several of these distribution relationships will be
providing significant production to Eagle Life by the end of 2016."

SPREAD DECLINES SLIGHTLY ON LOWER INVESTMENT YIELD

American Equity’s investment spread was 2.65% for the first quarter of
2016 compared to 2.67% for the fourth quarter of 2015 and 2.77% for the
first quarter of 2015. On a sequential basis, the average yield on
invested assets declined four basis points while the cost of money
declined two basis points.

Average yield on invested assets continued to be favorably impacted by
non-trendable items and unfavorably impacted by the investment of new
premiums and portfolio cash flows at rates below the portfolio rate and
high cash balances. Fee income from bond transactions and prepayment
income added 0.08% to first quarter 2016 average yield on invested
assets compared to 0.07% from such items in the fourth quarter of 2015.
The average yield on fixed income securities purchased and commercial
mortgage loans funded in the first quarter of 2016 was 4.14% compared to
average yields ranging from 3.73% - 4.03% in the four quarters of 2015.
The average balance for cash and short-term investments was $807 million
during the quarter, compared to $476 million in the fourth quarter of
2015.

The aggregate cost of money for annuity liabilities decreased by two
basis points to 1.93% in the first quarter of 2016 compared to 1.95% in
the fourth quarter of 2016. This decrease reflected continued reductions
in crediting rates.

Commenting on investment spread, John Matovina said: “Low interest rates
continue to pressure our investment spread. The markets are still
offering yields below our portfolio rate and we held more cash and
short-term investments than usual this quarter, both of which put
downward pressure on our investment income and average yield on invested
assets. We are counteracting the impact of lower investment yields by
reducing the rates on our policy liabilities but the impact on the cost
of money from these reductions is less than the impact on the average
yield on invested assets from investment purchases by a few basis
points. We continue to have flexibility to reduce our crediting rates,
if necessary, and could decrease our cost of money by approximately
0.52% through further reductions in renewal rates to guaranteed minimums
should the investment yields currently available to us persist. Most
importantly, we intend to maintain our risk discipline in managing our
investment portfolio and not chase higher yields in assets and asset
classes that do not fit our risk profile.”

The credit quality of the Company's bond portfolio remains high with
96.2% of its fixed maturity securities at March 31, 2016 rated
investment grade by nationally recognized statistical rating
organizations. This represents a modest decrease from 96.5% investment
grade securities at December 31, 2015 which is largely attributable to
securities in the energy, metals and mining sectors. As expected,
several of the securities owned by the Company in these sectors were
downgraded in the first quarter and the Company estimates that these
downgrades reduced its RBC ratio by five percentage points. At March 31,
2016, the Company's exposure to securities in the energy, metals and
mining sectors is summarized as follows:

Fair value of $3.1 billion and an unrealized loss of $227 million
compared to fair value of $2.9 billion and an unrealized loss of $336
million at December 31, 2015.

86% were rated investment grade, down from 95% at December 31, 2015.

At March 31, 2016, the Company's Watch List of securities deemed
at risk for a future other than temporary impairment assessment included
securities of ten issuers with a fair value of $82.4 million and an
unrealized loss of $39.9 million. This unrealized loss represents less
than 2% of the Company's consolidated stockholder's equity and its
statutory capital and surplus at March 31, 2016.

The Department of Labor (DOL) issued its final conflict of interest
fiduciary rule and related prohibited transaction exemptions (PTEs)
earlier this month. Unexpectedly, fixed index annuities were included
with securities products in the more onerous Best Interest Contract
Exemption (BICE) rather than PTE 84-24.

Commenting on the DOL fiduciary rule, Matovina said: "We are
disappointed with the final rule. Over the last two years, industry
representatives met with the DOL to discuss the structure, benefits and
distribution of fixed index annuities. The last minute change without
the opportunity to make comment is contrary to the rule making process
government agencies are expected to follow. Fixed index annuities are
treated in a way that cannot be justified as merely a means of
minimizing conflicts and the rule disregards their status under federal
securities and state insurance laws. The conflicts associated with
commission sales of all fixed annuities are identical, yet fixed index
annuities are denied treatment under PTE 84-24 which is available to
other fixed annuity products. Most importantly, the final PTEs will
limit access to a fixed annuity insurance product that more and more
Americans find to be the right solution for their retirement savings and
retirement income needs."

The Company's observations based on its analysis of the final rule and
related PTEs on the sale of fixed index annuities are as follows:

There are numerous obstacles to complying with BICE for the
independent agent distribution channel. BICE was not drafted to be
workable for independent agent distribution of fixed index annuities.
If BICE becomes operational for fixed index annuities, the Company may
partially mitigate the disruptive impact on sales and growth in
policyholder funds under management by updating and expanding its menu
of traditional declared rate annuities that offer lifetime income
riders and other features retirees find attractive. These products
will meet PTE 84-24's definition of a Fixed Rate Annuity Contract.

BICE is more workable for sales of fixed index annuities through
broker-dealers and banks and poses a smaller threat to sales of fixed
index annuities in those distribution channels. The Company
anticipates that many broker-dealers and banks will continue to sell
the product although some may seek changes in compensation and /or
product design to meet their compliance obligations.

The Company is aware of several parties considering litigation options
and strategies. The Company would not be surprised if multiple
lawsuits are filed on procedural and substantive matters.

Net sales in 2015 were 10% ahead of the sales level contemplated in the
Company's capital planning at the time of its 2015 equity offering and
net sales for 2016 may exceed the level contemplated last summer. The
Company intends to physically settle its two equity forward sales
agreements later this year. Physical settlement of these agreements
would generate approximately $135 million in net proceeds and the
Company would issue approximately 5.6 million shares of its common
stock. On a pro forma basis, assuming the net proceeds were invested in
securities with a NAIC 1 designation, the estimated RBC ratio at March
31, 2016 would be 337%.

The Company's capital planning in conjunction with the 2015 equity
offering included two alternatives for maintaining adequate regulatory
capital should sales growth outpace the capital generated by the initial
net proceeds from the equity offering and the net proceeds available
from the forward sales agreements. And while the recently issued DOL
conflict of interest fiduciary rule makes the 2017 sales outlook
uncertain, it would not be prudent for the Company to manage its
regulatory capital assuming the current level of sales is significantly
disrupted by the DOL rule. The two alternatives for regulatory capital
include reinsurance solutions and issuing additional debt. The Company
will be exploring reinsurance solutions with several potential
reinsurance counterparties. However, there is no assurance that
reinsurance discussions will produce a reinsurance solution on terms
acceptable to the Company. In the absence of a reinsurance solution, the
Company would consider raising capital through the issuance of
additional debt within parameters that would not jeopardize the
Company's current ratings from rating agencies.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to future operations, strategies,
financial results or other developments, and are subject to assumptions,
risks and uncertainties. Statements such as “guidance”, “expect”,
“anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”,
“estimate”, “projects” or similar words as well as specific projections
of future results qualify as forward-looking statements. Factors that
may cause our actual results to differ materially from those
contemplated by these forward looking statements can be found in the
company’s Form 10-K filed with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date the statement was
made and the company undertakes no obligation to update such
forward-looking statements. There can be no assurance that other factors
not currently anticipated by the Company will not materially and
adversely affect our results of operations. Investors are cautioned not
to place undue reliance on any forward-looking statements made by us or
on our behalf.

CONFERENCE CALL

American Equity will hold a conference call to discuss first quarter
2016 earnings on Thursday, April 28, at 9:00 a.m. CDT. The conference
call will be webcast live on the Internet. Investors and interested
parties who wish to listen to the call on the Internet may do so at www.american-equity.com.

The call may also be accessed by telephone at 855-865-0606, passcode
89115706 (international callers, please dial 704-859-4382). An audio
replay will be available shortly after the call on AEL’s website. An
audio replay will also be available via telephone through May 5, 2016 at
855-859-2056, passcode 89115706 (international callers will need to dial
407-537-3406).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its
wholly-owned operating subsidiaries, issues fixed annuity and life
insurance products, with a primary emphasis on the sale of fixed index
and fixed rate annuities. American Equity Investment Life Holding
Company, a New York Stock Exchange Listed company (NYSE: AEL), is
headquartered in West Des Moines, Iowa. For more information, please
visit www.american-equity.com.

1 Use of non-GAAP financial measures is discussed in this release in the
tables that follow the text of the release.

Portion of OTTI losses recognized in (from) other comprehensive
income

324

—

Net OTTI losses recognized in operations

(5,694

)

(132

)

Total revenues

417,604

408,995

Benefits and expenses:

Insurance policy benefits and change in future policy benefits

9,109

9,220

Interest sensitive and index product benefits

97,671

282,825

Amortization of deferred sales inducements

27,479

10,953

Change in fair value of embedded derivatives

265,857

51,213

Interest expense on notes payable

6,880

7,339

Interest expense on subordinated debentures

3,168

3,016

Amortization of deferred policy acquisition costs

49,713

14,286

Other operating costs and expenses

26,830

21,122

Total benefits and expenses

486,707

399,974

Income (loss) before income taxes

(69,103

)

9,021

Income tax expense (benefit)

(24,262

)

3,118

Net income (loss)

$

(44,841

)

$

5,903

Earnings (loss) per common share

$

(0.55

)

$

0.08

Earnings (loss) per common share - assuming dilution

$

(0.55

)

$

0.07

Weighted average common shares outstanding (in thousands):

Earnings (loss) per common share

82,129

77,042

Earnings (loss) per common share - assuming dilution

82,961

79,118

American Equity Investment Life Holding Company

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss), the Company has consistently utilized
operating income and operating income per common share - assuming
dilution, non-GAAP financial measures commonly used in the life
insurance industry, as economic measures to evaluate its financial
performance. Operating income equals net income (loss) adjusted to
eliminate the impact of items that fluctuate from quarter to quarter in
a manner unrelated to core operations. The Company believes measures
excluding their impact are useful in analyzing operating trends and the
combined presentation and evaluation of operating income together with
net income (loss) provides information that may enhance an investor’s
understanding of its underlying results and profitability.

Adjustments to net income (loss) to arrive at operating income are
presented net of income taxes and where applicable, are net of
related adjustments to amortization of deferred sales inducements
(DSI) and deferred policy acquisition costs (DAC).

NON-GAAP FINANCIAL MEASURES

Average Stockholders' Equity and Return on
Average Equity (Unaudited)

Return on average equity measures how efficiently the Company generates
profits from the resources provided by its net assets. Return on average
equity is calculated by dividing net income and operating income for the
trailing twelve months by average equity excluding average accumulated
other comprehensive income ("AOCI"). The Company excludes AOCI because
AOCI fluctuates from quarter to quarter due to unrealized changes in the
fair value of available for sale investments.

Twelve Months Ended

March 31, 2016

(Dollars in thousands)

Average Stockholders' Equity 1

Average equity including average AOCI

$

2,294,688

Average AOCI

(711,929

)

Average equity excluding average AOCI

$

1,582,759

Net income

$

169,086

Operating income

168,000

Return on Average Equity Excluding Average AOCI

Net income

10.68

%

Operating income

10.61

%

1 - The net proceeds received from the Company's public offering of
common stock in August 2015 are included in the computations of average
stockholders' equity on a weighted average basis based upon the number
of days they were available to the Company in the twelve month period.
The weighted average amount is added to the simple average of (a)
stockholders' equity at the beginning of the twelve month period and (b)
stockholders' equity at the end of the twelve month period excluding the
net proceeds received from the public stock offering in August 2015.